Share of diesel car sales has dropped to 22.5% in June quarter this fiscal from 47% in 2013
When Audi India announced crossing the record magical 10,000 units sales in 2013, around 90% of those were of diesel variants.
Cut to 2018, the percentage of the diesel variants in its sales has declined to 70%, and the company expects the ratio to be 50:50 by the end of this decade, driven by the demand for petrol variants of its cars such as Q3 and A4.
According to Audi’s India chief Rahil Ansari, the expectations are similar from Q5, which was launched in June this year.
Similarly, the share of Tata Motors’s petrol volumes has risen to 55% in recent months from around 20% around five years ago. S N Barman- VP, sales, marketing & customer support, Passenger Vehicles Business Unit, Tata Motors, said, “All our cars with petrol variants have shown high demand, primarily driven by the Tiago, Tigor and Nexon.”
The car makers claim that the entire industry is witnessing a shift towards the petrol variants. One of the strong reasons is the thinning gap between prices of petrol and diesel.
The central government deregulated petrol price in 2010 and diesel in 2014. It, later last year, based on international practices, allowed for daily pricing mechanism whereby the fuel prices get changed every day instead of a fortnight.
This bridged the price gap between diesel and petrol over the years.
At present the difference is of few rupees. One litre petrol costs Rs 88.26 in Mumbai while diesel costs Rs 77.47 on Tuesday. Hence, this has reduced the attractiveness of diesel cars.
Further, the general perception against the diesel among the public, positioning taken by environmentalists and government, uncertainty about future, lower resale value and court directions in the past are some of the other reasons leading to the shift.
The industry insiders claim that the demand is likely to tilt further towards petrol further with the introduction of BS-VI fuel, which will make the diesel cars more expensive.
As per the latest statistics available with original equipment manufacturers (OEMs), the share of diesel car sales has dropped to 22.5% in the June quarter of the current financial year from 47% in 2013.
In the passenger vehicle (PV) category, the share of petrol variant increased to 62% from 42% five years ago. Even in the utility vehicle segment, where diesel is the preferred fuel option, its share is now 84% compared with 97% in fiscal 2013.
The trend is forcing the OEMs to change. For example, Japanese auto major Toyota has made a shift towards a petrol-only policy for its non-SUV vehicles in the Indian market.
FUELLING A SHIFT
- The share of diesel variants in Audi’s sales has declined to 70%, and the ratio is expected to be 50:50 by the end of this decade
- The share of Tata Motors’s petrol volumes has risen to 55% in recent months from around 20% around five years ago
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